U.S. Fed balance sheet swells with MBS holdings  - The Fed’s balance sheet — a broad gauge of its lending to the financial system — rose to $2.179 trillion in the week ended Wednesday from $2.062 trillion in the week ended May 6.The Fed’s holdings of mortgage bonds guaranteed by agencies, including Fannie Mae (FNM.N) (FNM.P) and Freddie Mac (FRE.N) (FRE.P), totaled $431.55 billion in the latest week, up from $365.82 billion in the prior week.  - Reuters
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Treasury Offers Incentives for Mortgage Modifications - by Dawn Kopecki - The U.S. Treasury, seeking to strengthen government anti-foreclosure programs, will provide new incentives for lenders to modify mortgages where home-price declines are most severe or to pursue so-called short sales.  - Bloomberg

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About Geithner and China - The China Puzzle - DAVID LEONHARDT - NY Times

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The Chart That Launched the TARP - Rick Newman - Last fall, as the financial crisis was mushrooming, officials from the Treasury Dept. and the Federal Reserve had a hard time explaining to members of Congress why they needed a $700 billion emergency rescue plan. - US News
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Geithner gains currency - Investors on InTrade, the Internet exchange that deals in  predictions of events, have been selling off futures in Geithner’s anticipated resignation, which had been one of the market’s hottest commodities earlier this year. After reaching a peak of $20 in mid-March, two weeks after Geithner’s poorly received speech sketching out the Wall Street rescue plan, bets that Geithner would resign or be fired by Dec. 31 hit bottom this week, closing at $2.50. … - Boston Globe 

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TIM TO TAKE A TIMEOUT - PPIP: TOO MANY TAKERS - By KAJA WHITEHOUSE - …But the Treasury was so inundated with applications from wannabe managers of PPIP assets — it received 104 — that it added another, unexpected layer of red tape to the process, which could push back the launch of the program for several more weeks. The agency had expected no more than 40 applicants. … - NY Post

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Treasury Dept. is giving ‘cash-for-keys’ - Adding to its mortgage rescue program, the government will now offer additional incentives to get troubled borrowers out of homes. - By Les Christie -  CNNMoney.com